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I was so excited today. I got a call from a Realtor that had just showed one of my listings and his Buyer wanted to make an offer. This was exciting because I just placed the property on the market last week. It was an expired listing and a brand new home. The folks that own it had closed on it back in March with the intention of flipping it for a small profit. It's a great house. 2 stories, 4 bedrooms, 2.5 baths and 2093 sq. ft. of living space. This particular builder builds a very attractive house. It was purchased for $209,000 and was previously on the market for $279,000 and then reduced to $259,000. Well after 6 months and very few showings the listing expired and they called me, off of one of my expired letters, of course. Anyway, now they are a little desperate. Hey, a vacant house with $1,500 a month payments gets old real quick. So I did an analysis for them and decided the house was worth $235,000 to $239,000. The only problem is, there are about 30 just like it, on the market. Since they now need a quick sale, I suggested Range Pricing it from $219,000 to $239,000 trying to sell at $229,000. They won't make any money on it but they can recoup their money and get out before it gets worse. Flip flopped. Lesson learned. I hope.

Now as expected, Realtors are knocking the doors down to show Buyers this property. It's new. It's priced below market. And it will sell quickly. I am extremely confident it will be under contract before Christmas.

So anyway, my phone rings. "Hello, Tutas Towne Realty, the incredibly good looking and smart Broker Bryant here, how can I help you?" "Yes, I just showed your listing and my Buyer loves it and would like to make an offer." Trying not to sound excited I say, "Well that's great. Why don't you fax it over with a pre-approval letter and I will contact the Seller right away and see if we can get a deal negotiated." He says, "Well, my Buyer wants to negotiate verbally first" OK, now I don't do verbal, but thought I would at least hear him out before I make him write it up, "My Seller won't negotiate verbally but go ahead and tell me what you got?" He says, "My buyer would like to offer $200,000 and he wants the Seller to pay $8,000 in closing costs."

For some reason my excitement left me, "Does your Buyer really think he is going to get that house for $192,000? Did you look at the price? The property is Range Priced from $219,000 to $239,000 and the recent comparable sells have been in the $239,000 to $245,000 range. Anyway, it's not my house or my decision to make but I will step out on a limb here and tell you that there ain't no way in hell the Sellers are going to even look at this offer. But listen if you want to write it up and send it over I will present it to the Sellers, after all it is their house. Just don't hold your breath on this one."

So, he then proceeded to give me a 10 minute speech on how this was a Buyer's market and how homes are not selling and how he feels this is a good deal and they may never get another offer and blah, blah, blah...........

Well, to make a long story longer, he did say he would write it up and send it over to me on Monday. So we'll see. Like this deal will ever happen. My question is, since I don't work with Buyers, wouldn't it make sense to at least pull up comps before submitting an offer? Do you think having a clue as to the true market value would be helpful? I mean, this house is a pretty good buy. It's already priced right. It is the lowest priced home of this size in Poinciana and it's never been lived in.

The point is: My listings are already priced properly. My pricing strategy takes into consideration current market conditions and there is not much room for negotiating. And, if you are working with a Buyer, and want to try and get a deal, at least take the time to put the offer in writing. Give me something that's positive to show my Sellers. Do your homework. Representing your Buyer's best interest does not mean wasting their time or yours, by low balling houses that are already priced right. Get a clue. Real Estate is serious business and needs to be treated as such. Don't be a potato head!

Sometimes I just don't get other Realtors. I think I will send this guy an invite to ActiveRain, where the cream of the crop hang out. I bet you guys wouldn't do this. Would you?

 

77 Comments on I bet you guys wouldn't do this. Would you?

Reserved Parking For #1...TLW...ROAR!

Baby in your own way you are saying...NEXT. :)

Oh! Yes! I hear the NEXT and it does it for me hun.

Hubba Bubba!

Have I told you how goooood looking you are today?

Once again you have made me so proud. :)

Hubba Bubba...To "The" Broker. :)

TLW "The Lovely Wife"...Give Me The Heads Up I Want To Hear You Say NEXT...ROAR!

12/02/2006 06:55 PM by "The Lovely Wife"...Broker Bryant's Wife... (Co-Owner Tutas Towne Realty, Inc.)

We get those here almost every week.  Buyers want to take advantage and will offer absolutely ridiculous things.  Not that I am defending the agent, but he might be educating his customers and they may want to low ball anyway.  We, like you, don't do verbal.  We, like you, encourage all offers.  The worst that can happen is that your seller counters and the offer is accepted.

Buyers think that they can steal properties because it is a buyers market, we are dealing with a few that think that way.

12/02/2006 07:09 PM by Rick & Ines - Miami Shores Real Estate (Majestic Properties)

Lazy agent...stupid agent...I'd say. That agent should have done his homework and then if still presenting a low ball offer PUT it in WRITING...and try and STACK the offer a bit...maybe a big down payment...10 day closing or something like that.

Unfortunately being a buyers market we'll be seeing more and more of this.   

12/02/2006 07:17 PM by Monika McGillicuddy~REALTOR®~ N.H. Real Estate Broker & Trainer (Prudential Verani Realty/Hampstead)

Hi Broker Bryant,

                        This all sounds too familiar. The only thing that would scare me is in our state where the agent has made a verbal offer for her buyer this offer is now valid. It is just not enforceable.

Case law here has shown that a verbal offer not relayed to the seller no matter how ridiculous could come back to bite you. What has happened before up here is the buyer bumped into the seller later on down the road and mentioned how come you never accepted my offer of let's say 192,000. The seller then says what offer. Buyer says the one my agent said to your agent. OH OH. Seller says oh I ended up in foreclosure and the bank took it for a lot less. I wishhed I had known. Agent was found liable for not presenting a verbal offer.

I also know you mentioned she was going to put it in writing on Monday. If that doesn't come to fruition then I would call the seller and say hey verbal came in and it was suposed to be in writing. It's prety low but I know I have to tell you. Your butts covered if you were in NH. Fla. may  be different

NEXT !! 

Thanks Jay 

12/02/2006 07:20 PM by Jay McGillicuddy~Real Estate Broker (Prudential Verani Realty)

I saw 3 of them last week, or wait should I say " WEAK "..LOL

I dont understand how these kind of Agents, notice I did not say Realtors, make any money, and more than that who has trained these Agents or where they are getting these kind of ideas from.

Its a Bizzare world and I guess it takes all kinds.

Broker Bryant, have you written anything on this whole " Range Pricing " thing, it really sounds interesting from the bits and pieces I have heard...Thanks!

12/02/2006 07:25 PM by Cape Coral Real Estate 239-443-8795 - Jay LaGace (Century 21 Birchwood Realty)

I've had that happen.  And the buyer's agent thought telling me, "But they (the buyers) don't have much money!" was supposed to make me convince my seller to take an offer substantially below asking.  Not my problem.  I represent the seller.  Thought I'd forget that, huh?  (I did, of course, present the offer to the Seller, but she turned it down just as I knew she would - she'd seen my comps and knew better.) 

And we ended up selling the house to those buyers at asking price. 

 

12/02/2006 07:28 PM by Tricia Jumonville, EcoBroker® (ERA Colonial Real Estate)

Ines, I agree. I present all offers you just never know. However my listing agreement specifically states I will not present verbal offers. My sellers know this. BUT if was a reasonable offer even if it was verbal, I would run it by the Seller.

Monika, definitely lazy and extremely unprepared. I would have had this talk with my buyers way before agreeing to waste my time.

Jay, In Florida verbal contracts are valid just not enforceable. I don't think an offer is ever valid or enforceable since there is nothing to enforce. As I mentioned to Ines, my listings state I do not have to present verbal offers. Also, remember I speak with my sellers just about everyday. They trust me to do my job and use my judgement.

Jay, I have written many posts on Range Pricing. When you are on my blog just click on the Range Pricing tag on the right of the page(you have to be on my blog). Here are a couple of good ones. here and here 

Tricia, Got to love that one. A buyer with out much money is very appealing to my Seller:)

12/02/2006 07:57 PM by Bryant Tutas-Tutas Towne Realty, Inc

I admit it-i'd never invite that agent to AR....not from being a snob-but because some agents will NEVER get it-even if exposed to ideas from tons of brilliant real estate minds all churning together in one spot.  you never know if it's the agent's doing or the buyer's doing...which is why I always preface crappy offers (if i have no choice but to present) with 'don't kill the messenger!'-but always in writing.  if the buyer won't write it up to start with, good luck getting it in writing later if the seller bites...

12/02/2006 08:59 PM by Leigh Brown Charlotte NC Broker/Owner (RE/MAX Signature Properties)

BB.....

This isn't anything new to the Kansas City MO area. 

Unfortunately the media "leaked" (roaring laffin) the fact that it might be a buyers market and everybody in town are out to cut a fat hog in the behind! 

Add to that we have someone in town that are teaching Kansas City 1st time Buyers how to make an offer on a house.... and it must be that all that comes out of their mouths is LOW BALL LOW BALL LOW BALL!!  It's extremely frustrating.

I had an individual who'd attended one of those "classes" and made a 25K below list offer on new construction.  When I finally stopped laughing the buyers agent told me she'd attended a class on how to buy a home for the first time.

A-Mazing!

12/02/2006 09:07 PM by Kansas City North Real Estate :: Fran White 816-682-3897 (North Kansas City Real Estate, Reece and Nichols Residential)

To jump on the whole "Buyers Market" thing ... We get stuff like this all the time, recently. I love to point out that, technically, a "Buyers market" is when inventory is on the market 6+ months. Granted, our DOM has risen, we are still in a "Sellers Market"  ... so sorry! Not that desperate!

12/02/2006 09:16 PM by Mariana Wagner ~ Colorado Springs REALTOR® (Wagner iTeam -Keller Williams Clients' Choice)

Mariana...you are very lucky. Our market has definitely flipped. Been there done that and bought the tea shirt a few time.  Even though I saw it coming I was HOPING I was wrong. I am trying to read my REALTY Blogging book..but have been too busy reading AR!!! oh my!!

Monika

12/02/2006 09:33 PM by Monika McGillicuddy~NH Real Estate Broker (Prudential Verani Realty)

I too picked up a listing last Sunday and sold it Friday...

It does seem as the biuyers are watching the evening news about the "Buyers Market", which, by the way, does not exist here due to the large military base.

But they are lowballing all the offers lately.  They really want the property and they lowball...only to pay really really close to what we asked in the first place and it sure does make me do a lot of paperwork...sigh....     

12/02/2006 09:42 PM by Jeffery Prevatte

That is happening in my market.  It also just happened on my home I've been trying to sell in Michigan.  I ended up agreeing to it and know the buyer wants the $2000 riding lawn mower thrown in the deal.  Really urks me that some of the Realtors are encouraging their buyers to take advantage of the "buyers market" situation. 

12/02/2006 09:57 PM by Cynthia Sloop (Community Property Manager)

I like to encourage all offers. Please put it in writing so I can present it to the seller. Like, Bryant, I speak to the sellers often and would definitly share any verbal offers.

www.HomeRome.com

Baltimore,Md

12/02/2006 10:31 PM by Margaret Rome- Baltimore, Md.-HomeRome.com (TREC-Sell Your Home With Margaret Rome)

Verbal huh...Sounds like someones being lazy because they know it is a rediculous offer. Put up or shut up.  We are professionals everything should be in writting.

12/02/2006 10:31 PM by Rebekah Peters (Exit Realty Tri-County)

Don't take this as a knock on range pricing as it clearly has worked for you, but this situation isn't any different than what I would expect to see if attempted in my local market.

In your mind, and the sellers, you're saying up front the lowers offer they will accept is $219,000. If I'm the buyer or the buyers' agent, I absolutely would test their resolve. Is $219,000 the bottom line? Or might it be $218,000? And if it's $218,000 then why not $217,000. Or maybe go for $219,000 and ask for closing costs.

If we offered the $219,000 listed and the sellers countered, unless the buyers absolutely had to have the home, we'd likely wait it out until necessity forced the sellers to take the price they already said they were willing to accept.

The situation you gave is extreme and I can understand the indignation. I'd have told them to take a flying leap. But in the end it's an exaggerated game of chicken ... but it sounds like you win more often than not, BB.

12/02/2006 11:31 PM by Jonathan Dalton (RE/MAX Desert Showcase)

Jay's Decorated Cyber-houseBryant: Your posts almost make me want to become licensed here in the North Star * State just to have the unmitigated FUN you seem to have as a “sellers only” business! Back in the 70’s I was an investment property buyer & seller, and worked very closely with a Realtor® (then known as a “Realtor® Associate”), and though not what today would be described as a “flipper,” I did buy, repair, sell with some frequency. My agent was quite good (he was NOT the first one—he was the BEST I found), and would thoroughly research the current market value of the property I was interested in buying or selling, and would go into the negotiation process fully armed with the facts. Because of this research, and the skill of my agent (plus my realistic attitude—I was/am not greedy!), WE made a good deal of money over the years, and improved the housing stock while we were at it (the repairs done were done well). It was a fun & rewarding experience.

Jay Merton

12/03/2006 06:33 AM by Jay Merton & Medford Ambrose, the Codgers (Retired Handymen)

Thanks for all the comments everyone.

Jonathan, Actually my sellers will not accept $219,000. What we are saying is this house has a market value of $239,000, however we are willing to look at offers between $219,000 and $239,000 with $239,000 being a full price offer. An acceptable offer will close to $229,000. The buyer will not find a better home for less than $239,000. So waiting it out is a waste of time. If the buyer is truly wanting this size home he will have to pay the price. This house is the best priced home of this size in Poinciana. The asking price is already a deal. If the Realtor would have done his homework he would have realised that and counseled his buyer accordingly. In reality I will be in a multiple offer situation on this property before the end of the week as we are getting 2 to 3 showings a day.

Jay, I have several investors that I work with quite a bit. One owns over 100 properties. Even they look for deals they are usually very fair on pricing. They do want good buys but they don't low ball every house. And because of this they are constantly buying and selling properties for a profit. Then you have the investors that are constantly trying to hit a home run on every purchase and frankly they end up missing the game. You were doing true "flips" where you actually put a little sweat equity into the property to raise the value. That technique will work in any market. Today the "flippers" are just trying to buy low and sell high without doing anything to the property. Foolishness is what it is.

12/03/2006 07:44 AM by Bryant Tutas-Tutas Towne Realty, Inc

You have not seen anything yet...

We have had buyers show up and do this same thing repeatedly in recent weeks... we have one now who has offered $350K on a property just appraised at $420K!!! Then he insists that the seller do concessions of $8K in addition... comps show the property to be in the $415K to $430K range... the listing is (and remains) for $400K because the seller has to relocate to Great Britain in a month...

Turns out the buyer really wants this house... has called the owner directly, trying to cut out their buyers agent, saying they dont like the negotiating skill of that agent...

The owner has asked him to stop calling, and has asked me to call the other Realtor...

What a mess this buyer made of his offer... and has likely lost the chance to buy this house, as we have accepted an offer of $398K today.

Oh well, what do these guys think?

Come it at 30% below market and suceed? It is a buyers market alright. 

12/03/2006 11:23 AM by Rhode Island Real Estate -- Focus Professionals, Inc.

Sounds like a hail mary play from an investor - I suppose if they make enough of these calls - they may find someone desperate enough.

12/03/2006 12:16 PM by Suzanne Marriott, Associate Broker, CLHMS, e-PRO (Keller Williams Realty Professional Partners)

Cynthia wrote: "Really urks me that some of the Realtors are encouraging their buyers to take advantage of the "buyers market" situation."

 I am STUNNED and offended by such an attitude!  I thought Buyer's Agents have a fudiciary responsibility to their clients and what is is THEIR best interest; not "comps", "markets", or any other consideration.

If sellers can take a hard line during a "seller's market", why can't we buyers do the same in a "buyer's market"? 

Sauce for the goose is sauce for the gander......LOL

 

 

12/03/2006 02:03 PM by Stan

The only thing I see wrong with what was done here was the 10-minute speech!  It's amazing how many realtors think they call bully their way around pricing.  And while a buyer's agent does have fiduciary responsibility  to their client, they also have responsibility to be sure that the buyer knows what their chances are of winning a bid that is potentially insulting to the seller.   I agree with TLW...  NEXT! 

12/03/2006 05:26 PM by joanne Douglas (Terrie O'Connor Realtors)

Bryant, does this realtor live in my area?  I swear he does.  I had this happen recently.  Experienced realtors know how to work the buyers and show them this offer was ridiculous!

12/03/2006 05:29 PM by Kay Van Kampen, Broker, Springfield Missouri Real Estate (RE/MAX Solutions)

Bryant...late to the party, but after working on the week in review.... and then going back to fix each link, it just took a lot out of me.

LOL... now, I have to laugh. I agree with your point, do your homework and then go back to the buyer and say... hey, you have a great deal here. It's priced according to the market. But here is what kills me and my laugh.. (LOL)  This realtor and is now acting like a lawyer here in NJ.... usually trying to justify their worth, but in the lawyers case, their fee. Some people want to give it a shot so they can go back, jumping around like a Kangaroo and say.... "I got you a great deal, because I am great."  "send me referrals"  I have seen it and I am sure many of us have acted like this. Well, except the jumping around part.

And Joanne's last sentence hit the nail on the head. It's called clients expectations.

Good post.... 

12/03/2006 08:02 PM by Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages -- Mortgages (Infinity Home Mortgage Company, Inc)

Hummmmm, since I am not a Realtor I did not realize that some Buyer Agents think that a "Buyers Market" means "Stupid Seller Market". Good luck with this one Bryant, sounds like it is going to require a little patience

12/03/2006 08:40 PM by George Souto (McCue Mortgage Co.)

Has anyone here ever looked through the selling details in the MLS of homes that have sold?  Many times you will see price reductions of $50,000 or more.  Why wait for the seller to announce to the world that they'll take less.  Be proactive and make a "low" offer before the seller makes a price reduction.  You'll have less people to compete with.  I've seen homes finally sell for much less than I thought anyone would ever sell for.  You never know unless you ask.  Who's to say what a fair price is?  Why does a seller even have to get a fair price?  If I'm working for the buyer, I want them to get it for as much as possible below market value.  The seller can say yes or no.  It doesn't have to get personal.  Why take it as an insult or call the agent stupid for submitting an offer?  Many times real estate is not an efficient market.  Emotions and timing are key.  Of course if I'm working with a buyer who really loves the home and wants to make sure they get it, I'll let them know that a low ball offer might end up having them lose the home.  Many times it's an education for a buyer.  The only way some people learn is to experience losing a deal first hand.   I'm grateful for every offer I receive on a listing.  I always tell my sellers to counter and leave the door open.  Most deals end up right in the middle of the opening price range.  So a $239,000 listing and a $192,000 initial offer has a good chance at ending up as a deal for $216,000.  Only time will tell if $239,000 was the market value.  Until you have an offer better than $192,000 all you have is hope which you can't take to the bank.

12/03/2006 09:19 PM by Tim Maitski

We get offers far below reasonable levels too. There is nothing wrong with a buyer that is trying to get those in a soft market, as long as the agent is willing to jump through the hoops. The agent really needs to take the time to put it in writing along with the appropriate financing in place, then put it in the sellers lap. At the very least you get to empower your seller... put them in the drivers seat... it can be a cathartic experience. Usually makes the next one easier too.

One of my seller's accepted an offer that made me wish I had made that offer instead of the buyer. Below market, but fit their situation.

When Prudential was doing Value Range Marketing here, we all looked at the range and figured the low # is where we started to negotiate from. Mostly the agents that used it were so weak that the homes still weren't great on the low end.

*shrug*

12/03/2006 11:00 PM by Angus in Naperville IL (RE/MAX Affiliates)

Stan...  I didn't read your comment until now.  I agree with you to a certain degree. It's one thing to try and get a good deal, it's another thing when that realtor doesn't do their homework, to see if the offer is just ridiculous. If a realtor is good, thet can advise their client of an offer that would normally not fly. Sure, you don't always know.... but it's called communication, when the other realtor....as Bryant, tells the buyers agent that the price was reduced to sell. Price ranging, as Bryant markets himself in doing this.

12/03/2006 11:08 PM by Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages -- Mortgages (Infinity Home Mortgage Company, Inc)

Thanks for all the comments.

I have no problem with low offers and will present any and all offers to my sellers. However, if you are going to make a low offer and want your buyer to at least be taken seriously then write it up and give my seller some other incentives. In this particular case, it is quite obvious the property will sell for closer to $230,000, being as how that is already a below market price. It certainly won't be selling for $30,000 less on a 100% financing deal with e seller paying all the cost because the buyer has no money and they aren't even willing to take the time to put the offer in writing. That is not a serious buyer. They are tire kickers and time wasters. Period.  I've sold many many homes in this neighborhood and know the difference.

Stan good to see you. A good buyers agent will counsel their buyer and give them realistic advise on what they can expect as far as prices go. Their job is to help the buyer get into a home at a reasonable price. It is different if they are working with an investor. This was not an investor. This is a first time home buyer and will not be able to "steal" a house when he has no money.

The point of my post was not that the offer was low. The point was that if you are going to make a low offer at least take the time to present it as well as you can i.e in writing, with a preapproval letter and deposit. Give the seller something positive to consider. Doing anything less than this is a disservice to your buyer.

It's all about the presentation.

12/04/2006 07:42 AM by Bryant Tutas-Tutas Towne Realty, Inc

Bryant.... good point. We did get off base a tad. Presentation is key.... and not only was the offer low, as Bryant stated, they needed $8,000 in help. Basically.....wanting everything and no room to bargin with, per se.

12/04/2006 07:47 AM by Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages -- Mortgages (Infinity Home Mortgage Company, Inc)

Of course each deal is unique and should be handled as such.  The buyer w/o cash is in a weak position, should know that w/o any counsel; common sense should be screaming in their ear.

However, if I bring a cash deal to the table, *I* am the one that expects concessions in the form of price.  Find out what motivates the seller and tailor the offer accordingly.  Unless it's a "win-win" situation, the deal is dead.  One seller might want a two week close while another might want to wait until Christmas is over before moving out.

Two weeks sooner or two weeks later is no big deal to me but it might be the "deal maker" so I accomodate, but at a price, MY price.

My point is being treated as an equal in the deal, not a second class citizen who, as someone said, is "bidding" on a house.  If an agent used that term with me, it would cause me to walk away.  As far as I'm concerned, the seller is "bidding" for MY business.  After all, without a buyer, there can be no sale.  They want my cash more than they want their house; otherwise the seller would not be trying to sell it!

A good agent would do as Broker Bryant said, but sadly, there aren't nearly as many good agents as there should be and have sworn off buyer's agents altogether.  Why pay the commission when I'm not getting the representation?  I'll simply do it myself and save the 3%.

12/04/2006 08:36 AM by Stan

Bryant, Don't you just hate that? What I love are the ones that send out a zillion low ball offers hoping one sticks.

One of my investment properties that was listed with range pricing received a full price offer...love those days!

As I stated in my of my earlier posts regarding what California Realtor Refresher Course 101 it is imperative that a buyer's agent run a CMA on the property before writing an offer. When representing a buyer I not only provide this for the buyer but also have them sign a copy for my files. A good reminder that it was received and explained.

Who knows maybe the agent will get his act together and send a decent offer or move on.

12/04/2006 04:27 PM by Sacramento Real Estate and Luxury Homes, Assoc. Real Estate Broker,Gena Riede (Remax Gold, Assoc Broker)

Bryant, I forgot....come on over to (Groups-beta) Listings by Address and start putting all those listings in. I know we would all love to have your particpation and get to see first hand what some of your listings are. Come on over.

12/04/2006 04:42 PM by Sacramento Real Estate and Luxury Homes, Assoc. Real Estate Broker,Gena Riede (Remax Gold, Assoc Broker)

He definitely deserves an invite BB...and an education :)

12/05/2006 03:07 PM by Jeff Corbett (The XBroker)

The sheer number of grammatical errors, spelling mistakes and non sequitors on this page reinforces what most people outside of real estate already know... that most agents (by whatever allegedly professional name you call them) are too biased and too uninformed to make any judgments on the actual state of play in the market.  "True market value" is what someone is willing to pay.  Period.  Everyone has a reason why their market is different.  News flash: not everyone can be the exception.

12/05/2006 04:11 PM by tony the greek

Hi Tony, welcome to my blog. Actually I don't know if most is correct but you are right that there are a lot of Realtors that don't have a grasp on market conditions. However, I'm not one of them. I work a very limited market and have sold hundreds of homes in this particular market, which does make me an expert on "true market value". But, only in my market.

Not quite sure what spelling and grammar have to do with market knowledge but your opinion is appreciated.

Please feel free to hang around and read a while. Some of these blog posts are very interesting.

12/05/2006 04:18 PM by Bryant Tutas-Tutas Towne Realty, Inc

Ill bet hes the other Realtor (in disguise) :) 

12/05/2006 04:25 PM by Jeff Corbett (The XBroker)

Tony, the Greek, Although most of us try not to make spelling or grammatical mistakes, many of us are working...trying to be supportive of other bloggers and quickly putting our 2 cents in while answering the phone, taking messages, filling out paperwork...in other words, multi-tasking. So, please accept our apology if what we wrote in a hurry was offensive to you with spelling and/or grammatical mistakes.

Your statement, "True market value is what someone is willing to pay" is correct. I don't think that anyone here would challenge you with that statement. And Sellers have the option of accepting or rejecting what is offered. I'm sure you would agree with that. So, what exactly is the problem? Perhaps, there's a misunderstanding that can be easily resolved.   

As a side-note, I haven't checked my spelling so if there are any errors, please excuse. 

12/05/2006 04:27 PM by Sacramento Real Estate and Luxury Homes, Assoc. Real Estate Broker,Gena Riede (Remax Gold, Assoc Broker)

Hello, I am not a real estate agent but after reading about your range pricing I wanted to comment. I use the MLS in my area to search for a new home so I may be able to offer a view from the other side.

The whole range price concept is very simple. You use the range so that the low end price will show up in the MLS searches as the list price, thereby giving you more exposure for a certain type of house at a lower price point. I have a problem with this, it is a deliberate DECEPTION. You may say that because of your disclaimer that it makes it all well and good, and I admit that when the disclaimor is read it does clear it up SOMEWHAT, but at that point you have already gained the benefit from your deception (the benefit being that your phony list price has put your house on more buyer agents MLS search lists for their clients).

Here is the other thing. Say I like one of the homes with your range pricing and I make an offer for the low price. You of course will not accept that offer, ok, say it happens again and again. The problem is, that offer will never be accepted. So, in fact, that low price range is a LIE. Plain and simple.

Now, with the disclaimer, and the fact that the seller reserves the right to accept or deny any offer, what you are doing is legal. Ok, but I ask you, just because it is legal does that make it ETHICAL? I don't think so.

It seems some of the agents are having trouble understanding your range pricing. Maybe I can explain it a little better for them, here goes:

Take your listing and submit it in the MLS with a listing price that is BELOW whatever the market is so that it will seem like a deal and be included in more search results (more search results, more traffic). Then throw a disclaimer in there on the actual listing stating what the real listing price is.

One last thing, have you thought about what would happen if all the real estate agents started using your range pricing? The integrity of the MLS would be destroyed. Whose to say that agents wouldn't start increasing the range in their range pricing so that they could beat eachother in the lists. Just because you limit your range to 5 or 10% either way doesn't make it right. Maybe somebody will come along and range it 20 or 30%. Search results would be become useless, see the problem here??

12/05/2006 04:29 PM by Ryan from California

You know the more I think about it, the more I think this range pricing will eventaully be outlawed. If I were a real estate agent I might even be a little upset with you. I mean you are willing to be unethical thereby giving you an advantage, I guess I would have to compromise my integrity to compete. Enjoy it while it lasts.

12/05/2006 04:34 PM by Ryan from California

Hi Ryan, Thanks for your comments. Range Pricing is not for every property or for every market. However, in my market not only is it common practice, it is also specifically spelled out in out MLS rules and regulations on how to use it. I have used it for years and never have a problem with it. My sellers love it and that's who I am working for. My job is to get as much as I can in the shortest period of time for my seller's property. Range Pricing achieves this. I have had many Sellers accept the low price and in fact I have had many that accepted less than the low price. RP is just to get them in the door. The negotiations is a entirely different issue. But again it's not for everybody. Thanks for reading your opinion is appreciated.

BTW if you ever have a property to sell, try it with RP, your entire opinion will change when you are on the other side of the transaction.

12/05/2006 04:38 PM by Bryant Tutas-Tutas Towne Realty, Inc

Hi Ryan, Please don't call me unethical. You may disagree with the way I price properties but my ethics are not in question. You are welcome to read through all of my blog and I am sure it will change your opinion of my ethics. I take my duties as a Realtor very serious.

Anyway, there will never ever be a law dictating how a Seller can choose to price their property. Ain't ever going to happen. The listing price of a property, no matter how it is listed, never means a seller will accept that price. It is always 100% up to the Seller. Banks under price foreclosed properties everyday. They do this to create a bidding war. Same with auctions. Just because something is "out of the box" does not make it wrong.

 

12/05/2006 04:45 PM by Bryant Tutas-Tutas Towne Realty, Inc

Geez Tony The Greek...I guess you rilled up Gena. That's not good. I do hope you found my husband's response satisfactory. :) TLW...ROAR!

X: Y says "Good to seeing you Romping around in The Rain"...

12/05/2006 04:52 PM by "The Lovely Wife"...Broker Bryant's Wife... (Co-Owner Tutas Towne Realty, Inc.)

Hey Bryant,

Just because: it is a common practice, there are MLS rules governing it, your sellers love it (of course they do) and you have had success with it, does not make it right.

Again, I ask you what would happen if all agents used range pricing? If there were rules in place to limit how far below your REAL listing price your range went then I guess the integrity of the MLS could be held together, barely. Do you see how ridiculous that sounds? In fact, there are no rules to limit how far a realtor is willing to deceive with the low range. If all agents were to use this tactic then your governing body would have to take another look at it to save the MLS. I think the only outcome they would arrive at would be to not allow range pricing.

If all agents were to use this tactic then I guess when someone did a search with the MLS they would have to basically figure out what they were willing to pay for a house then automatically lower that number by 5 or 10% so the houses that showed in the search results more accurately matched their needs.

In other words, it only works because the majority of homes are not being listed in this manner so you can still achieve the desired deception.

You sound like a smart guy, I know you get this. Better to just admit it, which is fine, and hope that most agents will not employ this tactic.

 

12/05/2006 04:58 PM by Ryan from California

Bryant,

This is excellent, your post and the responses are interesting to follow. While I don't like range pricing... it has been an established business practice for years. You don't have an unethical bone in your body.

From a buyers perspective Stan makes excellent points... when he is being represented by agent.. there should be strength and no apologies for his purchase offers. I love working with professional buyers.

Tony the Greek is correct "True market value" is what someone is willing to pay.  Period." But that does not mean that blanket low-ball offers are what the market will bear... that someone can often be the next someone... not the first one. Your complaint (I believe) is not with the low offers but the poor job of of the agent performing their duties as the buyers agent.

I can understand Ryans point of view.... But as you mention nobody is going legislate how a seller can price their property.

12/05/2006 05:11 PM by Angus in Naperville IL (RE/MAX Affiliates)

Ryan, Luckily for me most Realtors don't understand it either. So your scenario would never happen. If all Realtors did start RP properties then I would have to find another way to market my listings. The last thing in the world I would want to do is the same as everybody else.

But really, your first line sums it up. The MLS allows it, my sellers love it and I have success with it. Sounds about right to me.

As for the integrity of the MLS, well in my market the majority of the homes are grossly overpriced already. As a consumer I would much rather look at a RP property that is priced within an acceptable range for the market, than other homes that are priced 30% to 50% above what the market will justify. A true buyer will have no problem purchasing a RP property if the value is there. In fact they may even be pleased that it showed up on their list of homes to view, because it was RP.

But again it's not for everybody. If I miss a few buyers, because they feel they are being deceived, then so be it, I don't work with or for buyers. It's a price I'm willing to pay. My responsibility is to my sellers.

12/05/2006 05:20 PM by Bryant Tutas-Tutas Towne Realty, Inc

Bryant,

I agree with most of your last post. I want you to know, it may sound as though I am trying to be a jerk, but I assure you I am not (well maybe a little, lol). I just wanted to point out what range pricing looks like to me. Although I still don't think it is entirely ethical, at least the way you do it is as ethical as it can be done.

The funny thing about ethics is everyone has different ideas about what is and isn't.

While we are at it, I have another beef with real estate agents, it has been irking me for awhile. I live in Bakersfield, Ca. and have owned my home for the last 9 years. Ok, my home value has tripled in that time which is great. Here is my beef, if prices have tripled here then real estate agents' pay has also tripled or just about, let's call it 2.5 times. Yet, when someone asks to negotiate their commission it's like they asked for their first born child or something! I mean come on! My wife is an escrow officer and have some friends who are agents and I know all about the job itself, I would rate it as average to above average as far as hard work, depending on the agent. But even with it being hard work,  when an agent won't negotiate their commission it's almost insulting. Fortunately there are some offices here in town who have gone to 4%, and of course they have seen their market share go through the roof. As far as a business model, this standard 6% no matter what the market is doing makes no sense. I guess that is why there are some anti-trust issues being brought up in your industry. Anyway, got it off my chest.

 

12/05/2006 05:46 PM by Ryan from Cali

Hi Ryan, Just so you know, I welcome a good discussion. The only thing I ever ask is that we debate the topic not the person. And of course no cussing since my wife tunes in. Other than that, have at it. I hope you come back and read more of my post. Some of these discussions get pretty good.

Now, this is your lucky day. Your question about commissions is an excellent and often asked question and deserves an answer. So you must read this post. To get the full gist of the conversation you have to follow the first link to the Bloodhound Blog. This will give you an example of how not to answer this question when asked. It's quite the read and may take a while my post has 138 comments on it. Enjoy and come back and let me know if we answered your question.

12/05/2006 06:00 PM by Bryant Tutas-Tutas Towne Realty, Inc

WOW!! I only scanned some of those posts, I should have known that this topic was already debated.

For all you real estate agents out there, I know how hard you work. I respect that. I think some people need your expertise more than others. I am a little biased, as I said my wife is an escrow officer and she can tell some real horror stories about some of the agents. Some agents basically dump most of the paperwork on her and have a real nasty attitude to boot. Then again, there are some who go out of their way to handle their share of the load.

You know after reading a lot of those posts I can see that most of the reason consumers are dismayed at agents is jealousy. It's hard to watch some of the kids here in Bakersfield sell 8 or 9 homes and go buy a $90,000 porsche! lol. Of course, they probably won't have much money later on down the road.

At the end of the day, this is my take on that subject. If an agent was making $100,000 a year by selling X number of homes and now that agent is making $300,000 a year just 4 years later selling the same X number of homes and isn't willing to negotiate the commission then that sucks because I am not a real estate agent! lol. Seriously, the real problem seems to be that there doesn't seem to be enough agents willing to drop the commission, kind of smells like a monopoly. I know in this town if an agent does that they are basically disowned.

I don't expect a response. I realize this is not the blog to talk about this subject, just wanted to follow up.

12/05/2006 06:17 PM by Ryan from Cali

Ryan. This is Broker Bryant's Wife. You can say whatever you like and pose whatever questions you wish to pose. We encourage the consumers to join us here. It gives you the chance to see the flip side of a BAD REALTOR. We are not all bad. We have some seriously good Realtors on this site. So, ask away. My husband will answer any question you have . No Cussing. No Character attacks. Those are our only rules. So ask away. :) TLW...ROAR!

12/05/2006 06:24 PM by "The Lovely Wife"...Broker Bryant's Wife... (Co-Owner Tutas Towne Realty, Inc.)

Ryan, I am one of those that does not reduce my commission. My average sale is about $235,000 and since I am only on the listing side, my average check is about $7,000. I sell between 30-50 houses a year. So I do OK. But I also spend about $4,000-$5,000 a month on advertising.

Now even though I don't negotiate my commission at time of listing, I will "chip in" if I need to help make a deal work. I do Real Estate because I enjoy it. I make money because I am very good at it. There are only about 10% of Realtors that make a very good income in this business most are struggling to get by. When you are selling your home, it just isn't wise to go with a Realtor that is struggling because their interest is in getting paid. A successful Realtor is in a better position to look out for your interest.  

But, if you ever need a Realtor in central Florida I promise, right now, in a public forum, to give you a $50 discount:)

BTW I drive an 8 year old Ford Expedition.

12/05/2006 06:31 PM by Bryant Tutas-Tutas Towne Realty, Inc

BB, I agree with you that every offer should be in writing. As a buyer's agent, why shouldn't you encourage your buyers to write up offers? it would show that your buyers are serious and puts them in a better position to negotiate.

There is some doubt in one of the comments about not presenting an offer even if it is verbal, since you have a duty to present all offers, and so I just wanted to add that by putting in writing in your listing agreement that you will not present verbal offers completely covers you, since the agency law (whether it is transaction broker notice or single agent) states that you will "present all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing." (my 2 cents)

 

12/05/2006 10:05 PM by Right About Real Estate

Hey Broker Bryant:

 Whatever happened to this house anyway? I don't see it in your listing anymore, did you sell it? Oh, and if you get this than check your article about the Title company and your check, my wife has something to say! lol. Hope all is well.

12/20/2006 08:06 PM by Ryan from Cali

Hi Ryan, I did sell it. About 3 days after this low ball of $192,00 I sold it for $232,000. In less than 30 days. Just as I had predicted. Closing next week. Another successful Range Pricing victory:) Ok I'm off to see what your wife has to say.

BTW I hope you have a great Christmas. 

12/20/2006 08:54 PM by Bryant Tutas-Tutas Towne Realty, Inc

from 279,000 down to 232,000....

 you seem very cocky and arrogant

01/05/2007 08:56 PM by billygoat

Hey Billygoat, Thanks for reading and commenting. Actually I am neither. As my post stated this particular house had been on the market for months with another Realtor because it was overpriced. The seller needed to sell so we priced the house to move it. It was either be sold or be foreclosed on. At $279,000 the house would still be sitting on the market as an overpriced listing along with hundreds of others in this particular area. After discussing the options with my seller it was her decision to price it properly to get it sold. She bought it to flip it but unfortunately by the time the house was completed the market had changed. She made a very wise business decision to get out from under a $2,000 a month mortgage payment, while she could. She still made a small profit and avoided harming her credit. Not sure how solving my seller's problem in quick fashion is cocky and arrogant but you are certainly entitled to your opinion no matter how far from the truth it may be.

Please feel free to read through my blog. I'm sure it will give you a different opinion about how I conduct myself and my business. Thanks for visiting. I hope you hang around a while. This site is full of excellent information and insight into what Realtors really do. Real Estate is about people not money.

01/05/2007 09:24 PM by Bryant Tutas-Tutas Towne Realty, Inc

What a wonderful read.

thank-you for your post.... it was quite informative and entertaining.

btw, the market in Pensacola inflated to an unrealistic height.... in addition, increased property taxes and the insurance rate increase has contributed to the mad dash to sell.  I, as a buyer, feel neither shame nor arrogance to offer lower than the asking price.... significantly lower.  I do my homework, too.  My profit will be in the purchase.  Business is business.  I am sorry so many people are experiencing cash-flow problems with their properties, however, their decisions have contributed to their dilema. 

your discussion has restored some of my faith in the professional realtor vocation.

thanks

01/08/2007 03:07 PM by rick w

Hey Rick, Welcome to my blog. It is definitely a Buyer's market and a great time to make a profit going in. Sellers are ready to sell and I have had several take very low offers just to be done with it. It's also important to remember that a lot of Sellers are flush with equity right now so coming down quite a bit, from the asking price, is doable. Just don't let your Realtor make the mistake this one made. Whether he wants to or not, he needs to write your offer up and make it look like you are a serious buyer, so the seller doesn't discount your offer. Good luck on finding the right property

01/08/2007 03:49 PM by Bryant Tutas-Tutas Towne Realty, Inc